What Is AMI? How Area Median Income Affects Your Energy Rebates
AMI: The Number That Determines Your Rebate Amount
When the HEAR (High-Efficiency Electric Home Rebate Act) program was structured, Congress chose Area Median Income as the primary eligibility metric. The logic: AMI is already calculated and publicly available by county, it accounts for regional cost-of-living differences, and it scales with household size rather than using a single national poverty line.
What it means practically: a family of four in San Francisco can have a household income of $150,000 and still be under 80% of that metro's AMI. That same income in rural Mississippi would put them well above 80% AMI. The rebate structure intentionally favors high-cost areas because that's where energy upgrades are both more expensive and more financially impactful.
The Three AMI Tiers and What They Mean
HEAR divides households into three tiers based on their income as a percentage of Area Median Income:
| Income Tier | AMI Range | Heat Pump Rebate | Water Heater Rebate | Panel Upgrade Rebate | Coverage Level |
|---|---|---|---|---|---|
| Low Income | Below 80% AMI | Up to $8,000 | Up to $1,750 | Up to $4,000 | 100% of project cost |
| Moderate Income | 80–150% AMI | Up to $8,000 | Up to $1,750 | Up to $4,000 | 50% of project cost |
| Higher Income | Above 150% AMI | Not eligible | Not eligible | Not eligible | 0% (utility programs may apply) |
The dollar maximums are the same across tiers — what changes is coverage percentage. A household below 80% AMI replacing their water heater for $1,800 gets $1,750 back (the program maximum). The same household at 120% AMI gets $875 back (50% of costs, capped at half the maximum).
How to Calculate Your AMI Percentage
HUD (Department of Housing and Urban Development) publishes AMI figures annually by metropolitan statistical area (MSA) and county, broken down by household size. Here's the process:
Step 1: Find Your Area's AMI
Go to HUD's income limits database (huduser.gov) and search for your county. You'll find the "Median Family Income" for your area. This is the 100% AMI figure.
Example AMI figures for 2025–2026 (100% AMI for a family of 4):
- San Jose, CA metro: $181,300
- San Francisco, CA metro: $169,800
- New York City metro: $129,500
- Boston, MA metro: $143,500
- Austin, TX metro: $117,200
- Detroit, MI metro: $90,100
- Rural Mississippi: $61,200
- Rural Alabama: $58,400
Step 2: Adjust for Household Size
AMI isn't one number — it's a table by household size. HUD adjusts the base figure using a formula that accounts for economies of scale in larger households. General multipliers:
| Household Size | Relative to 4-person AMI |
|---|---|
| 1 person | 70% |
| 2 persons | 80% |
| 3 persons | 90% |
| 4 persons | 100% (base) |
| 5 persons | 108% |
| 6 persons | 116% |
| 7 persons | 124% |
| 8 persons | 132% |
So in Detroit, a 2-person household's 100% AMI is $90,100 × 0.80 = $72,080. Their 80% AMI threshold is $72,080 × 0.80 = $57,664.
Step 3: Compare Your Gross Income
HEAR programs generally use gross household income from the previous year's tax return. Include all income sources: wages, self-employment, rental income, Social Security, retirement distributions, and investment income. Some states use different income definitions — check your state program rules.
Why AMI Varies So Much by Location
The geographic variation in AMI is substantial and intentional. It prevents situations where a family earning $80,000 in a low-cost rural area gets the same subsidy as a family earning $80,000 in Boston who's genuinely stretched thin.
Practical examples of the same income at different AMI percentages:
- $75,000, family of 4: Detroit (83% AMI — moderate tier), Rural AL (122% AMI — moderate tier), San Francisco (44% AMI — low income tier)
- $120,000, family of 4: Rural MS (196% AMI — above threshold), San Jose (66% AMI — low income tier)
If you live in a high-cost metro area, don't assume your income disqualifies you. Many two-income professional households in coastal cities fall under 80% AMI for their area.
How States Verify AMI Eligibility
Verification approaches vary by state, but common methods include:
- Self-certification: You sign a form attesting to your income. False certification is fraud.
- Tax return verification: Submit prior year's 1040 first page
- Pay stub verification: Most recent 60 days of pay stubs
- Third-party income verification: Participation in qualifying programs (SNAP, Medicaid, WIC, SSI) serves as automatic proof of low-income status in many state programs
If you participate in any federal means-tested program, lead with that — it usually simplifies and accelerates the eligibility determination.
The HOMES Program and Income
The HOMES program (Home Owner Managing Energy Savings) also uses AMI, but differently. HOMES rebates are doubled for low-income households — up to $8,000 versus $4,000 for higher-income households — when projects achieve 35%+ energy savings.
Unlike HEAR, HOMES doesn't exclude higher-income households entirely. It just provides less. A household above 150% AMI can still access HOMES rebates for qualifying energy efficiency projects.
See the HOMES vs HEAR comparison guide for a full breakdown of which program fits which household situation.
AMI and the Low-Income Home Energy Assistance Program (LIHEAP)
LIHEAP is a separate federal program — distinct from HEAR/HOMES — that helps low-income households with energy bills and weatherization. LIHEAP uses a different income threshold (150% of the federal poverty level, not 80% of AMI), which is generally lower than the HEAR 80% AMI threshold.
Households in the LIHEAP range are almost certainly below 80% AMI as well. They may be able to access both programs simultaneously, with LIHEAP covering energy bills while HEAR covers equipment upgrades. Check your state's LIHEAP program for coordination details.
Renters, AMI, and HEAR Eligibility
Renters face a specific challenge with HEAR rebates — most of the eligible improvements are to the structure of the home, and landlords control that. The HEAR program does allow landlords to access rebates for improvements to rental properties, but the income qualification is based on tenant income, not landlord income, for some state programs.
The renter situation is complex enough to warrant its own analysis. Read the energy rebates for renters guide for the full picture on how renters can access HEAR benefits.
What Counts as Household Income for HEAR
When calculating your income for AMI comparison purposes, include:
- W-2 wages from all household members
- Self-employment net income (Schedule C)
- Social Security income (including SSI and SSDI)
- Pension and retirement distributions
- Rental income
- Alimony received
- Investment income (dividends, capital gains — though some programs exclude capital gains)
Generally excluded (varies by state):
- Child support received
- Temporary one-time income events
- Non-taxable gifts
When in doubt, your state's rebate program administrator can clarify which income sources they count. Getting this right before applying is worth a phone call — being found over the income limit after submitting a rebate application causes delays and complications.
Income Changes: Which Year's Income Counts?
Most programs use prior-year income (typically the most recent filed tax return). If your income dropped significantly in the current year compared to last year — job loss, retirement, a business downturn — you may qualify at a lower AMI tier even if last year's return shows higher income.
Some state programs allow current-year income documentation for households whose income changed substantially. Ask your state program administrator. For California HEAR programs, TECH Clean California allows current-year income documentation with appropriate supporting documents.
Check your state's current rebate program at California HEAR rebates or New York income guide to understand how your specific state handles income verification and current-year income exceptions.